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+ Q&A Library This year, the company's sales has increas 13 This year, the company's sales has incrensed from $20000 to $240,000 and its profit has incresed by $12,00 compared to last year. The Degree of Operating I everage (TDO1.) this year is 4.00. Ifthe sales are expected to inerease hy 5% next year, how much profit dnes the company will make next yeur? A. S В. S C. S D. S E. None of the above 14,400 18,000 18,900 21,600 Transcribed Image Text: 13 This year, the compeny's seles hes incressed from $200,000 to $240,000 and its profit hes increesed by $12,000 compered to lest year. The Degree of Opereting Leverege (DOL) thia yearis 4.00. If the seles ere expected to incresse by 56 next year, how much profit does the compeny will meke next year? A.$ 14,400 B. $ 18,000 C. $ 18,900 D. S 21,600 E. None of the above

+ Q&A Library This year, the company's sales has increas 13 This year, the company's sales has incrensed from $20000 to $240,000 and its profit has incresed by $12,00 compared to last year. The Degree of Operating I everage (TDO1.) this year is 4.00. Ifthe sales are expected to inerease hy 5% next year, how much profit dnes the company will make next yeur? A. S В. S C. S D. S E. None of the above 14,400 18,000 18,900 21,600 Transcribed Image Text: 13 This year, the compeny's seles hes incressed from $200,000 to $240,000 and its profit hes increesed by $12,000 compered to lest year. The Degree of Opereting Leverege (DOL) thia yearis 4.00. If the seles ere expected to incresse by 56 next year, how much profit does the compeny will meke next year? A.$ 14,400 B. $ 18,000 C. $ 18,900 D. S 21,600 E. None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I asked thIS question yesterday  but  I recieved a wrong answer.

The correct answer i D $ 21,600

I need to understand how to solve it, please

Thank you

 

+ Q&A Library This year, the company's sales has increased from $... ISBN: 9781259964947 FIND Author: Libby Publisher: MCG 13 This year, the company's sales has incrensed from $20000 to $240,000 and its profit has incresed by $12,00 compared to last year. The Degree of Operating I everage (TDO1.) this year is 4.00. Ifthe sales are expected to inerease hy 5% next year, how much profit dnes the company will make next yeur? Chapter 4:... Section: Ch... A. S В. S C. S D. S E. None of the above 14,400 Problem 10 18,000 18,900 21,600 A Not helpful? See similar books Transcribed Image Text: 13 This year, the compeny's seles hes incressed from $200,000 to $240,000 and its profit hes increesed by $12,000 compared to lest yeer. The Degree of Opereting Leverege (DOL) this yeer is 4.00. If the seles ere expected to incresse by 5% next yeer, how much Stuck on your profit does the company will make next year? A.$ 14,400 B. $ 16,000 C. $ 18,900 D. $ 21,600 E. None of the above homework? Ask a question and get an expertly curated answer, in as fast as 30 minutes. Expert Solution ASK AN EXPERT Step 1 30 of 30 questions left this cycle Degree of Operating Leverage = (% change in operating Income / % change in sales) Renews on Feb 24, 2022 Step 2 *Response times may very by subject and question complexity. Median response time is 34 minutes for peid subscribers end mey be longer for promational offers. 4 = (9% change in operating Income / 5) % change in operating Income = 4*5 % change in operating Income = 20% If Sale increase by 5%, profit will increase by 20% Increase in profit ($12,000 * 20%) = $2,400 Expected Net Income ($12,000 + $2,400) = $14,400 Correct answer is option A $14,400 !!
Transcribed Image Text:+ Q&A Library This year, the company's sales has increased from $... ISBN: 9781259964947 FIND Author: Libby Publisher: MCG 13 This year, the company's sales has incrensed from $20000 to $240,000 and its profit has incresed by $12,00 compared to last year. The Degree of Operating I everage (TDO1.) this year is 4.00. Ifthe sales are expected to inerease hy 5% next year, how much profit dnes the company will make next yeur? Chapter 4:... Section: Ch... A. S В. S C. S D. S E. None of the above 14,400 Problem 10 18,000 18,900 21,600 A Not helpful? See similar books Transcribed Image Text: 13 This year, the compeny's seles hes incressed from $200,000 to $240,000 and its profit hes increesed by $12,000 compared to lest yeer. The Degree of Opereting Leverege (DOL) this yeer is 4.00. If the seles ere expected to incresse by 5% next yeer, how much Stuck on your profit does the company will make next year? A.$ 14,400 B. $ 16,000 C. $ 18,900 D. $ 21,600 E. None of the above homework? Ask a question and get an expertly curated answer, in as fast as 30 minutes. Expert Solution ASK AN EXPERT Step 1 30 of 30 questions left this cycle Degree of Operating Leverage = (% change in operating Income / % change in sales) Renews on Feb 24, 2022 Step 2 *Response times may very by subject and question complexity. Median response time is 34 minutes for peid subscribers end mey be longer for promational offers. 4 = (9% change in operating Income / 5) % change in operating Income = 4*5 % change in operating Income = 20% If Sale increase by 5%, profit will increase by 20% Increase in profit ($12,000 * 20%) = $2,400 Expected Net Income ($12,000 + $2,400) = $14,400 Correct answer is option A $14,400 !!
Expert Solution
Step 1

company uses operating leverage in order to calculate the break even point and it also help for the operation of selling price that will cover the cost incurred by the company to generate the profit. company which has on operating leverage are said to cover large amount of fixed cost each month regardless of unit of product they sell.

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